Some critics call 'cut!' for Minnesota Film Board as legislative audit looms

Six months after receiving a record $10 million to lure films to the state, the Minnesota Film & TV Board is under fire, with some legislators and industry insiders questioning whether it should exist at all.

Legislative Auditor Jim Nobles' concerns about the board have escalated to a point where he plans to seek a formal examination of it next month, when the legislative session begins. If the evaluation is unfavorable, funding for the program known as "Snowbate," and even the board's future, could be in jeopardy.

Film board director Lucinda Winter said she "would welcome" an audit. "We run a very tight ship, and our program will prove to be cost-effective as a means of bringing new business to the state," she said.

Long-simmering dissatisfaction among idled film-industry workers is surfacing in complaints that Winter has spent more time courting funds at the Capitol than generating out-of-state business. No major projects have been brought in over the past five years, a far cry from the 1990s, when such big Hollywood movies as "Fargo," "Grumpy Old Men" and Disney's "The Mighty Ducks" employed hundreds of Minnesotans and brought millions of dollars to the state.

Some in the Minnesota film industry say the board, which is a private nonprofit, should be government-run, as is the case in most states. Others contend that regardless of who runs the board, $10 million in rebate funds is too little, too late. Minnesota faces stiff competition from states offering much more — such as Michigan, which devotes $50 million to enticing films there.

Nobles said he has heard complaints about the board from legislators and citizens over the past few years, criticism that has intensified since the $10 million allocation.

"In addition to an audit, an evaluation is really needed to address broad policy questions," Nobles said. "Should the state be involved in supporting the film industry? If yes, what would be the most effective approach, and who should be in charge of that effort?"

Then Canada began courting Hollywood by offering studios up to 50 cents back on every dollar spent.

Seeing the economic boost that investment provided, U.S. states started following suit. Today more than 40 states have incentive programs that offer either cash rebates or tax credits on production expenditures. The $70 million Jason Statham action movie "Homefront," based on a Minnesota-set novel, was rewritten for a setting in Louisiana, which offers an unlimited 30 percent tax credit.

Minnesota's Snowbate program offers production-cost rebates of up to 25 percent, with a spending cap of $5 million in each of the next two years. The most ever allocated to Snowbate before was $2 million.

Winter, a former member of Minnesota Film & TV's board of directors, was hired as director in 2005 after a national search. Before then, she worked with her husband, corporate video producer Jim Ankeny, and as a freelance writer and producer.

Former board member Jill Sweiven left voluntarily four years ago after repeatedly asking about what she saw as questionable spending. During her three years on the board, she said, the nonprofit moved to a new office space in the Designers' Guild building at more than double the previous rent, and paid then-board President Victoria Wozniak's daughter to organize a gala that raised little money, both without full board approval. Sweiven also took issue with how much time Winter spent at the Capitol.

Winter said that she had "a clear directive" from her board to focus on meeting with legislators.

"If I hadn't spent that time, we wouldn't have the money," she said.

"Success isn't solely up to a film board," said Joe Chianese, a top Hollywood-based consultant to producers on incentives. "It's tough to compete with states that give back 30 percent or more."

Minnesota's $10 million may be less than in other states, Chianese said, but it's not chicken feed. Oklahoma, he said, allocated $5 million a year for the past few years and has managed to attract several high-profile films, including "August: Osage County."

Winter said she is focused on courting low- and mid-budget films as well as TV series, which provide more steady work over longer periods of time. The board is being unfairly blamed for broader industry changes, she said, adding that Minnesota's economy is healthier than those of some states with more incentives (like Rust Belt states), making it harder to get money from the Legislature.

The board did land a little dog the day after the $10 million became official. The low-budget indie "Dear White People" was shot in the Twin Cities last fall and was accepted into the prestigious Sundance Film Festival that opens this week.

"We couldn't have made the movie without [the film board]," said Effie T. Brown, producer of "Dear White People." The rebate helped seal the deal, she said.

But others say the board, which now has partly shifted its focus to administering grants to local filmmakers, has lost sight of its primary mission.

Producer Christine Walker said the board "has strayed from its purpose, which is to help out-of-town filmmakers navigate the permits and contacts here, and get tax incentives to bring them here."

Last year, Walker applied to the film board for incentives on the $1 million indie film "Stay Then Go," moving production from Los Angeles to Minneapolis after Winter told her that she would be eligible for substantial incentives. The $60,000 she eventually got fell far short of making that relocation worthwhile, she said.

State Rep. Phyllis Kahn, who recently began chairing the House's Legacy Fund committee, said that since the film board got the Snowbate grant, which came from general funds, it will receive no more Legacy money. While she supports the Snowbate money, she said that "we need to base future grants very strongly on results."

Local film and TV workers say keeping — and increasing — the Snowbate incentives is vital for the industry in Minnesota. But some think that the film office should be run by the state to save money, and led by someone with strong salesmanship.

"All you really need is a few desks and phones and a website," said photography producer Jason Hall, who left the film board not long after Sweiven due to similar frustrations about spending. "Most producers already think it's a state-run office anyway, and it makes no difference to them. We need someone with experience marketing the state in that job."

Greg Winter (no relation to Lucinda Winter) has worked as a cinematographer in town for 30 years, and has been on the film board for more than 12. He said the board is "doing as good a job as it can. The game has become one of incentive, and it's an escalating war. I sympathize with everyone who needs work, but the pie has been cut into smaller pieces."